Groups Push for End to Crop Subsidies
MICHELE NORRIS, host:
The Environmental Working Group is a Washington organization that's pushing for changes in the crop subsidy programs. Its online database shows that almost half of the federal crop subsidies in the current farm program went to just 19 congressional districts between 2003 and 2005.
Ken Cook is the president of the Environmental Working Group. He joins us here in our studio. So glad you're with us.
Mr. KEN COOK (President, Environmental Working Group): Thanks for having me.
NORRIS: So there are two kinds of subsidies for crops like corn or wheat. What are they and who gets them?
Mr. COOK: Well, there are two different ones. One set of subsidies is triggered by prices that Congress sets in farm bills. When prices drop below those congressional mandates, farmers get money. The other one is fixed. Farmers get the money whether or not prices are high or low, whether incomes are high or low. Those are called fixed direct payments. And in this coming five-year period, most of the money we'll be spending is going to be direct payments, automatic payments that would be made the farmers no matter what prices are.
NORRIS: And do they - these fixed payments, do they also receive those payments whether or not they farm?
Mr. COOK: You can receive a fixed direct payment whether you're actively farming, whether you're not farming at all and just absentee owner investor. So now, those payments really go to the land, and whoever owns it has a good shot at collecting them if they just keep up with minimal paperwork at USDA.
NORRIS: Now, when we think about the farm bill, we often think about the family farmers, someone in coveralls, out in the field. Is that a bit of a myth right now?
Mr. COOK: It's a bit of American gothic mythology. It's really very much the case that about 10 percent of the beneficiaries, very large and generally wealthy operations, get over 70 percent of the benefits. And so the payments are very concentrated in the hands of narrow slice of agriculture. And it's important to remember that two-thirds of the farmers in this country are not on the programs at all.
NORRIS: But the recipients of the subsidies, the farmers, are we talking about family farmers or are we talking about agribusiness?
Mr. COOK: Most of them are family farms, And the lion's share of the payments go to very large family farming operations. They may have partnerships, corporations and so forth.
NORRIS: Why are subsidies so controversial? The government has been making these payments for decades.
Mr. COOK: Well, I think one reason they're so controversial is because people know a lot more now about who's getting them. And they realize that money is going to very wealthy individuals. More recently, we've learned that a tremendous number of checks have been cut by USDA to farmers who are dead. The second main controversy is how much we're spending and why. If we're spending, for example, this year, a $5 billion in direct payments, fixed payments regardless of price, that's a controversial matter for most people.
NORRIS: And now - but the American farm economy is based on these subsidies. There are farmers who say they could not survive without these government subsidies.
Mr. COOK: I think what you're seeing really for the first time is a divide between the farmers who are making the case they need subsidies all the time and those who are saying we're ready to go into more of a free market. And one of the reasons we're seeing that is huge increases in prices as a result of the ethanol boom. On top of that, we're going to be paying, as taxpayers, $2 billion to corn farmers, who most of whom would be making very good money. And that's why it's become so controversial that we're automatically making payments to producers who were doing very well in the marketplace.
NORRIS: Now, I could hear on the other side of this argument that there are great fluctuations in these prices. So the farm bill comes at a time - the debate over the farm bill comes at a time where prices are up. You see very high - the highest are high, but the lows are very low. And some would say that in the end, it all evens out, and that the farmers do need the subsidies to keep their heads above the water.
Mr. COOK: Well, in this farm bill that passed the House, they have retained the safety net for the low price periods. The real question is, when every analysts who's looked at this has made it pretty clear that for the next five years, driven by the ethanol boom, there's very little chance that we're going to see low prices for corn and soy beans and wheat.
NORRIS: What about something like, say, cotton?
Mr. COOK: Well, for cotton and rice, there the problem is that we're producing far more than we need for the domestic and foreign market. We're not competitive. What we should have been trying to do in this farm bill cycle, I think, is adjust so that corn and wheat and soy bean farmers who are making good money in the marketplace, they should have gotten less money than they're going to get. And we should also have begun to trim payments for cotton and rice. We didn't do that in this farm bill yet. We still got the Senate action ahead of us.
NORRIS: Ken Cook is the president of the Environmental Working Group. Thanks for joining us.
Mr. COOK: Thank you.
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